Accounting Question

Q1. Differentiate between routine operating decisions and non-routine operating decisions with suitable examples. List all non-routine operating decisions and explain any two decisions with suitable examples.

Note: Your answer must include numerical examples for each method along with qualitative consideration.

Suppose that you are working in a company as a cost manager that has two support departments and two operating departments. Determine the total department cost and allocation base for these departments and allocate the support department cost to the operating department based on the following methods:

• The direct method
• The step-down method